The Indian economy “can grow” at 6.4 per cent during the current fiscal, aided by the improvement in “investor sentiment,” said C. Rangarajan, Chairman of the Economic Advisory Council to the Prime Minister, on Thursday.
Speaking at an interactive session organised by the Bangalore Chamber of Industry and Commerce (BCIC), Mr. Rangarajan said the recent flurry of policy announcements relating to Foreign Direct Investment (FDI), and the efforts to remove “supply-side bottlenecks”, would result in growth improving from the 5 per cent growth estimated for 2012-13.
“A serious effort is being made to remove the bottlenecks in the clearance and implementation of large projects,” he said. Moreover the establishment of the Cabinet Committee on Investment “should go a long way in achieving this objective”, he added. The “special emphasis” on important infrastructure sectors that lie in the public domain such as coal, power, roads and railways, would also enable in overall growth picking up.
Observing that inflation must be tamed, Mr. Rangarajan pointed out that even though the official inflation rates, as measured by the Wholesale Price Index has slowed down in recent weeks, retail-level inflation, as measured by the Consumer Price Index, is almost at double digit levels. He warned that if food price inflation is at high levels, it could result in “generalised inflation” in the wider economy. He placed the blame for high food prices on the escalating minimum support prices.